1

DEPARTMENT OF HEALTH AND HUMAN SERVICES

FOOD AND DRUG ADMINISTRATION

CENTER FOR DRUG EVALUATION AND RESEARCH

PULMONARY-ALLERGY DRUGS ADVISORY COMMITTEE

Thursday, June 10, 2004

8:03 a.m.

Holiday Inn Gaithersburg

The Ballroom

Two Montgomery Village Avenue

Gaithersburg, Maryland

PARTICIPANTS

Vernon Chinchilli, Ph.D., Acting Chair

Shalini Jain, PA-C, MBA, Executive Secretary

MEMBERS

Carolyn M. Kercsmar, M.D.

Fernando D. Martinez, M.D.

Theodore F. Reiss, M.D. (Industry Rep)

Michael Schatz M.D., M.S.

Karen S. Schell, RRT, (Consumer Rep)

Erik R. Swenson, M.D.

SPECIAL GOVERNMENT EMPLOYEE CONSULTANTS (VOTING)

T. Prescott Atkinson, M.D., Ph.D.

I. Marc Moss, M.D.

Wayne Mitchell, M.D.

C O N T E N T S

PAGE

Call to Order and Opening Remarks:

Vernon Chinchilli, Ph.D. 5

Introductions 6

Conflict of Interest Statement:

Shalini Jain, PA-C, MBA 7

Opening Remarks:

Robert Meyer, M.D. 10

History of the Montreal Protocol and 21 CFR 2.125 13

Medical Considerations:

Eugene Sullivan, M.D. 40

Economic Considerations:

Randall Lutter, Ph.D. 60

Questions from the Committee to the Speakers 76

Open Public Hearing (1)

Pamela Wexler, U.S. Stakeholders Group 93

Elaine Jones, Ph.D. GlaxoSmithKline 104

Ron Garutti, M.D., Schering-Plough 119

Open Public Hearing (2)

Ballard Jamieson, Jr., International 143

Pharmaceutical Aerosol Consortium

Neil Flanzraich, IVAX Corporation 149

Richard Rozek, Ph.D., National Economic 162

Research Associates

David Doniger, Natural Resources 172

Defense Council

Joseph Rau, M.D., American Association 181

for Respiratory Care

Jodi Finder, Asthma Therapy Coalition 183

Steven Bernhardt, M.D., 190

Honeywell Chemicals

C O N T E N T S (Continued)

Open Public Hearing (2) (Continued)

Nancy Sander, Allergy and Asthma Network 193

Mothers of Asthmatics

Anthony Marinelli, M.D., American 198

Thoracic Society

Ira Finegold, M.D., College of Allergy, 203

Asthma and Immunology

Spenser Atwater, M.D., Joint Council on 207

Allergy, Asthma and Immunology

(statement read by Ms. Jain)

Committee Discussion 211

Adjournement 282

P R O C E E D I N G S

Call to Order and Opening Remarks

DR. CHINCHILLI: Good morning, everyone.

This is a meeting of the Pulmonary-Allergy Drugs

Advisory Committee. We are here today to discuss

whether the use of chorofluorocarbons as

propellants in albuterol-metered dose inhalers in

no longer an essential use under the criteria as

set forth in the Code of Federal Regulations 12 CFR

1.125.

My name is Vern Chinchilli. I am the

Acting Chair today for the committee. So we will

have some opening remarks. The first thing I

usually do is introduce--I will ask each committee

member--we will go around the table--to introduce

themselves. Please make sure you hit the

microphone button so it is on.

Why don't we start with Dr. Reiss. Oh; he

is not here? Dr. Atkinson?

DR. ATKINSON: I am Prescott Atkinson,

Allergy and Immunology at University of Alabama in

Birmingham.

DR. SCHELL: Karen Schell, Consumer

Representative from Kansas.

DR. MARTINEZ: I am Fernando Martinez from

the Arizona Respiratory Center, University of

Arizona.

DR. SCHATZ: I am Michael Schatz, Allergy

and Immunology, Kaiser Permanent, San Diego.

DR. KERCSMAR: Carolyn Kercsmar, pediatric

pulmonology, Rainbow Babies and Children's Hospital

in Cleveland.

DR. MOSS: Mark Moss, Pulmonary and

Critical Care, Emory University in Atlanta,

Georgia.

DR. CHINCHILLI: Vern Chinchilli. I am a

biostatistician from the Penn State Hershey Medical

Center.

MS. JAIN: Shalini Jain, Exec Sec, Acting,

and, at this point, for this meeting for the

Pulmonary-Allergy Drugs Advisory Committee.

DR. SWENSON: Erik Swenson, Pulmonary and

Critical Care Medicine at the University of

Washington in Seattle.

DR. LUTTER: Randy Lutter, Economics, with

the Office of the Commissioner in FDA.

DR. MITCHELL: Wayne Mitchell, Office of

Regulatory Policy in the Center for Drug Evaluation

and Research. I am the draftsman on the rule.

DR. SULLIVAN: I am Gene Sullivan. I am

the Deputy Director of the Division of Pulmonary

and Allergy Drug Products at FDA.

DR. MEYER: I am Bob Meyer. I am the

Director of the Office of Drug Evaluation II in the

Center for Drugs at FDA.

DR. CHINCHILLI: Thank you, everyone, for

attending.

Next, Shalini Jain will talk about the

Conflict of Interest Statement.

Conflict of Interest Statement

MS. JAIN: The following statement

addresses the issue of conflict of interest with

respect to this meeting and is made part of the

record to preclude even the appearance of such at

this meeting.

Based on the agenda, it has been

determined that the topics of today's meeting are

issues of broad applicability and there are no

products being approved at this meeting. Unlike

issues before a committee in which a particular

product is discussed, issues of broader

applicability involve many industrial sponsors and

academic institutions. All special government

employees have been screened for their financial

interests as they may apply to the general topic at

hand.

Because there has been reported interest

in pharmaceutical companies, the Food and Drug

Administration has granted general-matters waivers

to the special government employees who require a

waiver under Title 18, United States Code Section

208 which permits them to participate in today's

discussion.

A copy of the waiver statement may be

obtained by submitting a written request to the

agency's Freedom of Information Office, Room 12A-30

of the Parklawn Building. Because general topics

impact so many entities, it is not prudent to

recite all potential conflicts of interest as they

apply to each member, consultant and guest speaker.

FDA acknowledges that there may be

potential conflicts of interest but, because of the

general nature of the discussion before the

committee, the potential conflicts are mitigated.

With respect to FDA's invited industry

representative, we would like to disclose that Dr.

Theodore Reiss is participating in this meeting as

an industry representative acting on behalf of

regulated industry. Dr. Reiss is employed by

Merck.

In the event that the discussion involves

any other products or firms not already on the

agenda for which an FDA participant has a financial

interest, the participants are aware of the need to

exclude themselves from such involvement and their

exclusion will be noted for the record.

With respect to all other participants, we

ask, in the interest of fairness, that they address

any current or previous financial involvement with

any firm whose products they may wish to comment

upon.

Thank you.

DR. CHINCHILLI: Thank you, Ms. Jain.

We are ready to start the regular part of

the agenda. Dr. Meyer, the Director of the Office

of Drug Evaluation II, will have some opening

remarks.

Opening Remarks

DR. MEYER: Good morning. Although I

service Director of the Office of Drug Evaluation

II in the Center for Drugs, I, for many years,

served for the Center Lead on issues related to the

Montreal protocol and phase-out of CFCs from

FDA-regulated medical products, specifically MDIs

for asthma and COPD.

So, on behalf of the FDA, I wish to

welcome all the participants in today's meeting of

the Pulmonary and Allergy Drugs Advisory Committee.

I want to thank you in advance for your time and

your efforts and your thoughtfulness in your

discussions and advice.

When we were originally planning this

meeting, we had hoped the meeting would coincide

with the open public comment period of a proposed

rule to delist albuterol as an essential use of

ozone-depleting substances, specifically CFCs.

This is now, indeed, the case although the rule

just went on display at the Federal Register and,

subsequently, on our web page yesterday afternoon.

I believe you have been provided copies.

I would point out that, although the

proposed rule is posted on these sites, it is not

officially published until June 16 so what you have

in hand is a pre-publication version that means

some dates are missing and the pagination will

change when it is officially published in the

Federal Register.

I would also point out that the six-day

comment period starts on the day of official

publication which will be June 16 although,

clearly, the discussions today will be considered

as part of the docket for us to consider in coming

to the final rule.

We particularly look foreword today to

input from the public in our public hearing portion

of the meeting and I thank those individuals and

organizations who are presenting or have otherwise

submitted materials for the record.

All of the presentations, submissions and

the deliberations of the committee and advice given

today will be entered into the docket, as I said,

and will help us to move forward towards finalizing

this rule with a target of Summer of 2005.

I would note to the committee that we are

not seeking any formal votes today on a particular

question but do, very much, seek your counsel on

the matter at hand whether the use of CFCs in

albuterol metered-dose inhalers remains an

essential use under the provisions of our

regulations.

We will have three speakers from the FDA

today. I will first speak, giving a history of the

Montreal Protocol and FDA's regulations regarding

essential use of CFCs. Dr. Eugene Sullivan, from

the Division of Pulmonary and Allergy Drug

Products, will then follow with considerations

related to the current situation with albuterol and

its essentiality as well as some related issues.

To close FDA's presentations, Randy

Lutter, who is FDA's Chief Economist in the Office

of Planning, will speak on economic considerations

related to the potential for delisting albuterol as

an essential use.

Again, we would like to thank you for your

time in being here and look forward to today's

discussion.

DR. CHINCHILLI: Thank you, Dr. Meyer.

I believe you are on the agenda next for

your presentation.

History of the Montreal Protocol and 21 CFR 1.125

DR. MEYER: Good morning, again, from this

venue. When I arrived at the agency about ten

years ago this July, I can assure you that I never

envisioned I would be standing here representing

the FDA on the issue of ozone protections. As a

pulmonologist, it was not something that entered my

mind at that point.

But life is full of happy occurrences.

This picture on my title slide is from NASA's web

page and shows the largest recorded ozone hole over

the Antarctic which actually was shot last

September of 2003. This serves as a fitting

graphic to start a talk on the history of the

Montreal Protocol as well as the FDA regulations

that related to chlorofluorocarbons and

ozone-depleting substances.

The stratosphere is a region of the

earth's atmosphere that begins roughly ten to

fifteen kilometers above the earth's surface,

depending on the particular part of the earth one

is focused on, and extends up to 50 kilometers.

Most of the ozone, over 90 percent of the ozone, in

the atmosphere is in this stratosphere where it

acts, in part, to filter ultraviolet B radiation by

absorbing this band of wave length from sunlight.

Increases in UV-B reaching the earth's

surface are detrimental to human health in a number

of ways as well as to other life forms and to

synthetic materials. The human consequences of

most note are increases in skin cancer as well as

cataracts and alterations in immunity. Those skin

cancers are both of the melanoma type as well as

non-melanoma.

This, then, is the background as to why

there is a worry about protecting the ozone layer.

Also, by way of background, since we are talking

about regulations, I would like to explain how

rules are made. The FDA operates under laws or

statutes, most notably the Food, Drug and Cosmetic

Act, as well as other statutes.

However, no matter how well written or

detailed a law may be, it cannot provide sufficient

detail to inform the specific process of

regulation. This is accomplished by the writing of

rules which, when finalized, have the force of law

behind them as it represents the agency's

implementation of the respective law that we are

operating under.

The usual pathway for reaching a final

regulation or rule is by what is called Notice and

Comment Rulemaking. Formally, that involves the

FDA publishing a Notice of Proposed Rulemaking, or

NPR, in the Federal Register such as will shortly

occur for albuterol.

An NPR typically has a comment period

between 60 and 90 days--again, that, for the rule

at hand is 60 days beginning on June 16--during

which time comments from the public, including the

regulated industry, are solicited. These comments

are then individually considered and addressed in

reaching a final rule. Rulemaking is an integral

part of the CFC non-essentiality determinations. I

will speak more on this later.

The purpose of my talk, then, this

morning, is to give a history and background of the

Montreal Protocol and to FDA's regulations with

regard to ozone protection. The timeframes for

these, as they developed, overlap and, obviously,

the efforts intersect. So I will interweave the

two topics in my talk.

Back in the mid-1970s, two scientists

operating out of trial University of California at

Irvine posited that chlorofluorocarbons were

reaching the stratosphere were UV radiation slowly

would cleave off the chloride atoms that, in turn,

catalyze the destruction of ozone. This work was

by Molina and Rowland, who later was awarded the

Nobel Prize.

At the time that this article came out,

chlorofluorocarbons, or CFCs, were ubiquitous in

use in multiple applications. They became

widespread for a number of reasons. Amongst these

were that CFCs are quite non-toxic which,

parenthetically, makes them excellent for use in

inhalers, very stable and had physical-chemical

properties that were advantageous for use in

refrigerant systems, air conditioners and aerosols.

The stability of these gasses is, in part,

why they are so devastating to the stratosphere.

They have a very long half-life when they reach the

stratosphere and, therefore, damage the ozone layer

for many, many years.

In 1978, really in a fairly remarkably

short time after the seminal publication by Rowland

and Molina, the U.S. Government acted to address

the issue of CFCs and to place a general ban on the

use of CFCs as propellants in consumer aerosol

products. This was accompanied by a rule from FDA

in the relevant chapter of the Code of Federal

Regulations or what we call the CFR, and that, for

the FDA, is the 21st Chapter, banning the use of

CFCs in all regulate products except for those

deemed as essential uses.

This rule is now called 2.125 because that

is the citation where it is published. That is how

we will be referring to it throughout much of the

day. Notably exempt at that time were broad

classes of asthma and allergy products such as a

nasal steroids, the inhaled steroids, and

adrenergic bronchodilators.

In 1987, as the science of ozone depletion

advanced and as there was further evidence

accumulated about ozone reductions, a global treaty

known as the Montreal Protocol on substances that

deplete the ozone layer was initiated. At that

time, 27 nations, including the USA, were

signatories.

I would note, just to make this topical to

sort of current events, that this was during the

latter years of the Reagan Administration. The

original protocol now has at least 184 signatory

countries. As of the time that I queried the web

page for the Secretariat of the Ozone Efforts about

a month, it was 184 countries. Countries are also

called parties under the terms of the protocol.

This is widely considered a successful

example of global, environmental cooperation.

Indeed, there is evidence that the chloride levels

in the stratosphere have stabilized in recent years

and it is expected that the stratospheric ozone

layer will slowly recover to levels that were seen

in the early 1980s by the middle part of this

current century.

The original phase-out of CFCs was slated

for the Year 2000. That was taken in London in

1990. This was moved up, however, by meeting of

the parties in Copenhagen which occurred in 1992.

It was moved up to 1995, at the end of '95, because

of increasing evidence of marked ozone depletion,

particularly over the extreme southern hemisphere,

as you saw in my first slide.

This phenomenon is commonly called an

ozone hole. It is not really a true hole but an

area of extreme depletion. I should point out

that, although it is a depletion that is

particularly prominent over the southern

hemisphere, it has occurred globally.

I should also point out that, while we are

focussing on CFCs today because that is the

relevant topic for the FDA, the protocol, itself,

has controls on many other ozone-depleting

substances such as halons, HCFCs, methylbromide,

carbon tetrachloride and other substances.

So, while the CFCs are an important issue

to FDA and, indeed, to the Montreal Protocol, I do

want to be clear that the protocol is a much

broader effort in scope than simply the

chlorofluorocarbons.

In accordance with the Copenhagen

Amendment to the protocol, the production and

importation of CFCs became illegal in economically

developed countries including the United States as

of January 1, 1996. The rest of the world is

expected to have phased out new CFCs by 2010.

Metered-dose inhalers, or MDIs, for asthma and COPD

are currently considered as potentially acceptable

essential uses of CFCs. I say potentially

acceptable because there is a nomination process

that parties undergo if they want to produce or

import CFCs for use in MDIs.

These nominations have to be done annually

and the process generally begins nearly two years

prior to the year in question. So, for instance,

the U.S. had to submit its nomination for 2006 in

early 2004.

I would also point out that nominations

are historically approved by consensus of the

parties to the Montreal Protocol but, actually, if

the consensus process fails, there is a mechanism

within the protocol to default to a two-thirds

majority decision.

I wanted to go through sort of how the

protocol has evolved over time This is a decision

of the parties from the Copenhagen meeting.

Decision IV, or this IV, means that it was from the

fourth meeting of the parties and it was the 25th

decision taken at that meeting. This was the

definition at the time that they decided the

phase-out would begin on January 1, 1996, or the

ban on CFCs, that stated that, "All essential uses

of CFCs would have to be based on products being

necessary for public health and that there were not

adequate alternatives." The failure to have

adequate alternatives could either be based on

technical problems or economical problems.

But this was macroscopic in terms of both

this determination as well as the general use. In

other words, it was widely accepted at that point

in general that the uses of CFCs and MDIs for

asthma and COPD could be considered an essential

use.

However, over time, the protocol evolved

so that, as the phase-out progressed, as

alternatives became available, this sort of more

generally and broad interpretation of what was an

essential use became narrower and narrower in

scope.

In Beijing, at the twelve meeting of the

parties in the Year 2000, another decision was

taken that said that any product approved after

December, 2000, must individually meet these

criteria for essentiality under Decision IV-25.

So, in other words, it is not just a general

consensus any longer that the use of CFCs for

asthma and COPD was acceptable but, in this case,

any new product would have to individually meet

this.

So this was a product-centered

determination of essentiality that essentially

precluded new CFC generics and, actually, many

other new CFC products. It essentially was

shutting the door, for all intents and purposes,

except under extraordinary circumstances for any

new CFC MDIs.

This past year, in Nairobi, a further

decision was taken by the parties that became even

more narrow and specific in scope. It stated that

essential-use nominations from parties which, in

the past, had been lumped and general and not

parsed out for the purposes of the protocol's

evaluation, or the Montreal Protocol evaluation.

Now it stated that essential-use

nominations have to be specific; for example, a

country might say they need some

undetermined--well, they would have to give a

specific number, but some number of tons for

albuterol. No quantity of essential-use CFCs would

be authorized for albuterol. This is, I think,

particularly germane today--that no quantity of

essential uses of CFCs would be authorized,

period--actually, this is a little bit of a

misstatement in the way this is terms--if a country

does not submit to the meetings of the

party--beginning of the open-ended working group,

excuse me, in the summer of 2005--a clear plan for

when albuterol, specifically, would no longer be

essential.

Let me go through that again, because this

is key. Countries who request essential uses,

including the United States, will have to submit to

the Ozone Secretariat of the Open-Ended Working

Group in the summer of 2005 a plan or a

date-certain for when albuterol will no longer be

considered essential. If parties fail to do that,

including the U.S., we will not receive and

essential-use allocation at all.

Now, turning a little bit from the

evolution of the Montreal Protocol back to our

rules and regulations, the Clean Air Act Amendments

of 1990 codified the Montreal Protocol into U.S.

law. The implementing EPA regulations specifically

call for FDA to define what is an essential medical

use and refers to our 2.125 as the source of the

listing of those essential products.

I remind you, however, that 1.125 was

finalized before the Montreal Protocol existed and

before the Clean Air Act Amendments.

The rule, as promulgated in 1978, stated

that a CFC-containing product regulated by FDA was

misbranded or adulterated under the FD&C Act; that

is, it would be illegal under our authority unless

deemed essential and listed in 2.125. The

definition of essential was that there would be no

technically feasible alternatives; that the use of

CFCs in that particular product provided

substantial health, public or environmental

benefit; and that the release of the CFC was small

or justified given the public-health benefit.

Notably, the FDA rule had no mechanism to

determine when things were no longer essential and,

therefore, to delist them. It did have ways to add

new classes of drugs to the list and, in fact, that

was done over the years. But it had no specified

way for delisting things.

Another important feature of the rule that

needed to be correct is that many drugs, including

albuterol, were not specifically mentioned as

essential uses but, rather, there were broad

definitions of drug classes, if you will, such as

albuterol and other beta-agonists being under the

general term of adrenergic bronchodilators for

human use.

So, realizing that we needed to correct

some things about this rule that was written prior

to the Montreal Protocol and the Clean Air Act, and

specifically to develop a mechanism for delisting

things that were no longer essential, FDA, in 1996,

undertook revisions. Because of wanting to do

these revisions in the very most public and

informed manner, the FDA took an additional step to

the steps that I gave you earlier for the

publication of a rule, doing something called an

Advance Notice of Proposed Rulemaking which,

actually, starts with another cycle of notice and

comment.

This effort proved very successful if

measured by the number of comments. We got close

to 10,000 comments to this Advance Notice of

Proposed Rulemaking, many of which, I would point

out, were actually patient-based comments sparked

by lobbying efforts.

We then took all 10,000 comments and

reviewed them and responded to them. I would note

that there were many fewer substantive comments but

still all of the comments were carefully reviewed

and considered. That resulted in the publication

of a Notice of Proposed Rulemaking in 1999.

That proved to be less controversial in

many ways and it received many fewer substantive

comments and comments overall and, as I said, had

seemingly much less controversy. So FDA moved

forward with amending 2.125 in July of 2002 and

this went into effect six months later.

The 2002 revisions did a number of things.

First of all, it listed essential uses as

individual moieties. I would point out that, to

coincide more correctly with the Montreal Protocol,

it no longer referred simply to chlorofluorocarbons

but to ozone-depleting substances. But, for the

purposes of today and for all intents and purposes,

most of FDA's activities, you can consider ODS, or

ozone-depleting substances, as being synonymous

with CFCs in terms of this discussion.

So, for instance, albuterol is now

separately listed rather than there just being a

broad class without any citation of individual

moieties.

The revisions also added a higher hurdle

for investigational new drugs to be developed with

CFCs and it raised the bar for new listings of

essential uses as well. There was also a list of

criteria, importantly for today, for determining

when individual uses were no longer considered

essential.

One other revision I would point out that

is not on this slide was that we shifted the rule,

because of the re-write of the Clean Air Act, to

state that if something was no longer essential, it

would be considered illegal to market it under the

Clean Air Act and not under the Food, Drug and

Cosmetic Act.

Let me go through these important

nonessentiality criteria. I would point out that

Dr. Sullivan will revisit these in his talk

specific to albuterol, but I think they are worth

hearing a couple of times.

For a specific moiety to be considered

nonessential, there would have to be at least one

non-ozone-depleting-substance product--in other

words, a non-CFC product--with that same active

moiety, and here I am only talking about a moiety

where there is only one marketed-brand product or

one marketing strength, so, at least one active

moiety with the same indications, same route of

administration--in other words, oral albuterol

would not be considered an alternative under these

criteria--and about the same level of convenience.

We stated in the preamble to the final

rule that, although dry-powdered inhalers might fit

this description, we felt that MDIs would most

neatly do so and, I think, most logically do so.

In addition to this, these alternatives

would have to have adequate postmarketing data to

prove that they are not only safe and effective for

approval purposes but will serve as an adequate

alternative in the marketplace. Importantly, there

would have to be production capabilities and

supplies that are adequate to meet the needs of

patients who depend on the use of this moiety for

the treatment of their asthma or COPD and patients

who require the CFC product are adequately served.

I would state, and I am sure that Gene

will bring this up as well, that, under the

considerations for adequately served, is the issue

of price in that--not so much whether there will be

any impact on the price to the patients but will

patients be disaffected or unable to get the

medicine if there is a price differential.

We didn't build that in as an explicit

consideration, the cost issue, but it was mentioned

in the preamble because many of the comments to the

ANPR and to the PR as we developed this re-write of

2.125, brought up the issue of affordability.

Now, specific to albuterol which

has--actually, this should say one branded product

available and three generics marketed--for moieties

with more than one available product or strength

such as albuterol, you would need at least two

non-ozone-depleting-substance products with the

same active moiety, the same indication, route of

administration, about the same level of

convenience, and the other criteria were the same.

So, in other words, if the moiety was

represented in the marketplace by different

strengths or different numbers of products from

different manufacturers, we felt it important that

there be sort of at least--if not a full match to

the range, at least alternatives that represented

some choice.

Let me just show you, to wrap up this

background, where all this has led over time. This

is a graph of the global situation for CFC

essential uses. Let me go through the two lines

here. This is 1996. The open space is actually

the year, not the hatch mark, so we go from 1996

out to 2006 on the X axis. On the Y axis, we are

talking about metric tons. A metric ton is 2200

pounds, so these are metric tons of total CFC used

for essential-use allowances in these developed

countries.

The red line is the amount that was

exempted--in other words, the amount that was

nominated and approved by the parties. The blue

line is the amount that was actually used over

time. The green line is the stockpiles. So these

are the amounts held by the countries that don't

represent new production.

You can see that the peak of the use

worldwide, or at least in these developed countries

that were putting in essential uses, was just about

9,000 metric tons occurring in the 1997-1998 range.

This has fallen by 2003 down to just a little bit

over 4,000 tons. One would project from the amount

nominated, which generally has been historically

higher than the amounts actually used, that this

will further fall in the coming two years rather

dramatically. So the amounts nominated in 2006 are

down below 3,000 metric tons.

I apologize for this being a little harder

to see. I could not manipulate this as easily as

the last one. But this is the situation for the

United States, itself. Again, this is metric tons

per year on the Y axis, years on the X axis. I

know that will be very difficult for people in the

audience to see but the main point here is this is

the blue line, which is the amount used for

metered-dose inhalers in the United States.

You can see, for the most part, that it

has been reasonable stable from the

pre-Montreal-Protocol years through the time period

of the Montreal Protocol, although there was a

rather substantial fall in the last couple of

years--this goes out to 2002--at which time the

total use was just a little bit over 1500 metric

tons in the United States. I would point out that

the use for albuterol is a substantial portion of

the United States nomination.

Let me also now talk about the transition

within the United States, itself. What we have

here is a slide that attempts to display the

original listings under the 2.125 and then the

specific listings under 2.125, and then to display

changes over time.

So, originally, 2.125 had the broad class

of beta-adrenergic agents: inhaled corticosteroids;

nasal steroids; the cromones--cromolyn and

nedocromil were actually separately listed;

ipratropium; atropine, which was actually approved

for use in Desert Storm; a combination product,

albuterol and ipratropium.

I think it is important for me to point

out, if Dr. Sullivan does not and if it is

repeated, I think it is still and important thing;

we are not talking about a combination product

today. We are only talking about those products

that solely contain albuterol as their active

ingredient; and then a number of other products,

many of which were actually, as you can see, not

MDIs. So we had talc, contraceptive foams, rectal

foams, ergotamine MDIs, polymxin, anesthetic drugs

including those that directly use CFCs, and

nitroglycerine.

When the re-write of 2.125 was finalized

in 2002, those products listed in red were taken

out, many of these because they either did not meet

the criteria any longer or were not considered

essential under the Montreal Protocol, or they were

no longer marketed.

So, at the time of the finalization,

isoetharine, isoproterenol, the nasal steroids as a

class, contraceptive foams, rectal foams, polymyxin

and nitroglycerine all came out and were not

separately listed in 2.125.

The products in yellow could be considered

as potential for delisting soon, these because they

are no longer available, marketed as CFC products.

One of the things in 2.125 re-write that was said

was that, if a product was not marketed for a

substantial period of time, one could consider it

to be not essential. Those would include

bitolterol, salmeterol, which was discontinued by

the manufacturer, dexamethasone, talc, ergotamine

MDIs and anesthetic drugs.

Beclomethasone is no longer marketed, the

MDIs, at least not newly produced MDIs, and there

are alternatives. So that is another potential

delisting. Albuterol, I guess I did not put in

yellow here because that is what we are here to

discuss today is whether that has met the criteria

that we laid out in the revisions of 2.125.

So, to conclude my talk, the U.S.

Government moved proactively to address the issue

of ozone depletion shortly after the development of

the ozone science, and the U.S. Government had a

key role in the formation and the conduct of the

Montreal Protocol. The Montreal Protocol is

considered a successful treaty that has led to

important reductions in CFCs and other

ozone-depleting substances and, as I mentioned,

there are data to suggest that the recovery of the

stratospheric ozone layer is in the early stages.

Now, the Montreal Protocol, as I pointed

out from the evolution of some of the decisions

taken, is increasingly moving towards control in

its specific essential uses, notable amongst those

would be albuterol.

Just as a transition slide, I chose

another picture off the NASA web page of the ozone

depletion. Remember that I said we would recover

to the early '80's levels by the mid part of this

century. This shows the Antarctic region in 1983

and the Antarctic region in 1993. You can see the

difference where the white is the thicker ozone.

You can see the difference in the ozone layer in

that decade.

So, thank you very much.

DR. CHINCHILLI: Thank you, Dr. Meyer.

You finished a few minutes early so let's

see if there are any questions from our committee

members. I have one, Dr. Meyer. What was the

rationale behind the decision about not pursuing

this with the--not considering the dry-powdered

inhalers as a similar moiety?

DR. MEYER: What we said was that we

thought they could serve as an alternative but it

would not be as automatic as an MDI. So, in fact,

I think if there were an albuterol dry-powdered

inhaler that met those criteria otherwise, we would

consider it.

I think, at the time we were writing it,

we had considerations such as, at that point,

albuterol was available in a capsule, an individual

capsule, rotohaler-type device where one would

place it in, turn it and breathe. We did not feel

that that had sort of the same level of convenience

and portability and so on as an MDI. So I think we

wanted to not exclude all dry-powdered inhalers out

of hand but say that they would have to meet

certain levels of convenience and patient

acceptability.

Again, the presumption in the preamble to

rule was that the MDIs would most neatly do that

because they are very much similar.

DR. CHINCHILLI: Dr. Martinez?

DR. MARTINEZ: Dr. Meyer, in your

multicolored slide, there was some products in

white. I presume those will continue to be

available by way of CFCs and includes epinephrine,

for example; is that correct?

DR. MEYER: Some of those products in

white are, in fact, under development in that are

alternatives being developed. Some are not. One

of the provisions in the rule that I didn't bring

up today because it wasn't fully germane but I

would be happy to answer as a part of your question

is the fact that, beginning next year, we will have

the ability to call this body into meetings, have

the advisory committee come to meetings, to discuss

those products that remain on the list that are not

being reformulated and whether they remain

essential.

I think, just parenthetically, epinephrine

will be something that will be important for us to

discuss at some time in the future.

DR. CHINCHILLI: Any other questions from

the committee? If not, thank you, again, Dr.

Meyer.

I guess we will move forward with Dr.

Sullivan, the Deputy Director of the Division of

Pulmonary Drug Products.

Medical Considerations

DR. SULLIVAN: Good morning. I am Gene

Sullivan. I am a pulmonologist. I am also the

Deputy Director of the Division of Pulmonary and

Allergy Drug Products at FDA. For the next twenty

or thirty minutes, I am going to be discussing some

of the medical considerations in regard to this

proposal to remove albuterol from the list of drug

substances that are considered essential uses for

CFCs.

Following my talk, you will hear from Dr.

Lutter, as Dr. Meyer mentioned. Dr. Lutter will go

into more depth in regard to the economic aspects

of this question. Then, following that, you will

hear some very important information from

interested parties who will be speaking during the

open public hearing.

So this slide provides a background

overview of my talk. Dr. Meyer has just given a

very nice background on the overarching issues

about the Montreal Protocol and the FDA Regulation

2.125, so my background remarks will be brief.

Then, also, briefly, I will review the currently

marketed albuterol MDI products. But the bulk of

my talk will be in this section specifically

looking at the criteria that Dr. Meyer mentioned

that are included in the Amended 2.125, so the

currently existing regulation, and specifically

examining those criteria in regard to how they

apply in the case of albuterol.

Then, finally, I will touch on a couple of

other issues which, although they are not directly

responsive to the criteria laid out in 2.125, I

think are clearly important issues to consider when

deciding on a path forward with regard to

albuterol.

So, again, Dr. Meyer has provided very

nice background on the Montreal Protocol and on the

FDA regulation concerning the essential-use

determinations, that being 21 CFR 2.125 and, as Dr.

Meyer mentioned, I will be referring to it as 2.125

from now on.

As you know, the agency is currently

considering whether albuterol, in fact, has met the

criteria that are listed in 2.125 for removal from

the list of essential uses. This process that we

are embarking on is in keeping with the goals of

the Montreal Protocol, specifically, the goal of

phasing out production and importation of

ozone-depleting substances including

chlorofluorocarbons.

I think the step forward with albuterol is

an important step in that direction particularly

because approximately half of the annual

essential-use CFC allocation in the U.S. is for

albuterol. We are moving forward in this direction

in light of the fact that there now exist two

alternative, non-CFC albuterol metered-dose

inhalers on the market in the U.S., that being

Proventil HFA and Ventolin HFA.

In addition, in 2003, the American Lung

Association submitted a citizen petition on behalf

of a group of organizations, collectively referred

to as the U.S. Stakeholders Group. That petition

requested that the agency move forward with this

rulemaking process in order to remove albuterol

from this list.

That citizen petition is included in your

background materials. Your background materials

also include other communications we received from

the Stakeholder's Group as well as the submissions

to the public docket that were submitted by various

interested parties and organizations in response of

the citizen petition.

So what are the currently marketed

albuterol metered-dose inhalers? Obviously, they

can be divided into those that contain CFCs, which

are ozone-depleting substances, and those that

don't contain CFCs. In terms of the CFC MDIs,

there are several. First of all, there is the

branded product, Proventil, marketed by

Schering-Plough. This was approved in 1981. In

addition, there is a product marketed under a

Warrick label which is marketed under the same NDA.

Then there are several generic versions.

Actually, four have been approved. The first of

these was approved in 1995. Currently, three of

these are being marketed. As you may know, in

1981, there were actually two branded albuterol CFC

MDIs that were approved, the other one being

Ventolin. That is not listed here because it is no

longer marketed within the U.S.

Now moving to the non-CFC MDIs or, and I

will use the shorthand, as alternatives, these

don't use CFCs. Rather they use HFA 134A which is

a substance that does not affect the ozone layer.

There are two of these HFA products; Proventil HFA,

which was approved and initially marketed in 1996

and, more recently, Ventolin HFA, which was

approved in 2001 and was marketed in 2002.

So this is the regulation, obviously, that

is at the heart of today's discussion, 2.125,

called the Use of Ozone Depleting Substances in

Food, Drugs, Devices or Cosmetics. Among a number

of thing, one of the things that it does is it

lists specific drug moieties for which the use of

CFCs is considered essential.

In addition, as Dr. Meyer mentioned, it

sets forth criteria. There are four such criteria

that must be met in order to remove a drug moiety

from the list of essential uses.

I will run through these again. Dr. Meyer

has been through them. I will run through again,

though, because I think they are the heart of

today's discussion. First of all, and here I am

referring to active moieties represented by two or

more NDAs which is the case, as I mentioned, with

albuterol.

The first criterion for removing a drug

from the list of essential uses would be that at

least two non-ozone-depleting-substance products

that contain the same active moiety are being

marketed with the same route of delivery for the

same indication with approximately the same level

of convenience as the ozone-depleting product.

The second criterion is that supplies and

production capacity for the alterative must exist

or be expected to exist at levels that would be

sufficient to meet patient need.

The third criterion is that adequate

postmarketing-use data should be available for the

non-ozone-depleting products. Again, as Dr. Meyer

mentioned, that is to provide some reasonable

assurance that no unanticipated limitation of the

alternative product emerges during the

postmarketing, so real-world experience that was

not detected prior to approval.

Then, finally, the fourth criterion is

that patients who medically require the product

would be adequately served by non-ozone-depleting

products containing the same active moiety and

other available products.

So now I am going to walk through each of

these criteria and look at how they apply to

albuterol. The first criterion; again, at least

two products containing the same active moiety, the

same route of delivery, the same indication and

approximately the same convenience of use. So,

clearly, the alternatives that we are discussing,

Ventolin HFA and Proventil HFA, both have the same

active moiety, albuterol. Both are delivered by

the same route of delivery, oral inhalation, and

carry the same indication, prevention and relief of

bronchospasm and patients with reversible

obstructive airway disease and prevention of

exercise-induced bronchospasm.

I should point out the initial NDA,

Proventil, was approved down to the age of 12 and

Ventolin was approved down to the age of four.

Both of the alternative products are approved down

to the age of four.

Finishing up with the first criterion, the

final bit of it is the same level of convenience.

Now, when we looked at the same level of

convenience, we described, in the Preamble, various

aspects of what we might mean by that. We looked

at things like portability, preparation before use

and the physical effort of manual dexterity that

might be needed to administer the drug.

The CFC and HFA MDIs are quite similar and

so have very similar portability and require

similar degrees of physical effort and dexterity to

use. I should mention, in regard to preparation

before use, that, in the early experience with the

first HFA that was approved, the Proventil HFA, we

became aware that there were occasional instances

of clogging of the actuator if they were not

cleaned properly.

Now, the CFC and the HFA inhalers have

actually very similar cleaning instructions. It is

just evident that patients using the HFA inhalers

need to pay more attention to the cleaning

instructions that are already in the label for both

products.

The second criterion is a little bit more

difficult to definitively establish at this point.

This is the criterion that states that supplies and

production capacity for the alternatives need to be

at levels that would be sufficient to meet patient

needs. At least in part, because of the price

differential between the generics and the currently

marketed FHA products, the market share for the HFA

products, at this point in time, is much smaller in

comparison than the market share of the CFC

products.

So, if the CFC products were to become

unavailable suddenly today, the current supplies

and production capacity of the HFA alternatives are

not sufficient to meet patient need. That is

because, simply, that the manufacturers would need

time to ramp up production. However,

GlaxoSmithKline, in its statement in response to

the citizen petition submitted to the docket and

included in your background package has stated that

it is confident that additional internal and

external capacity can be installed to insure

adequate supplied and production capacity for

Ventolin HFA and that this could be accomplished

within twelve to eighteen months.

In addition to this statement in the

docket, GlaxoSmithKline and, also, Schering-Plough,

will be speaking today and I expect that at least a

portion of their comments may address specifically

this criterion.

The third criterion that we are applying

is that adequate U.S. postmarketing data be

available for the alternatives, again, looking for

unexpected real-world problems with the

alternatives. At this point in time, we have

Proventil HFA which has been marketed for seven

years and Ventolin HFA which has been marketed for

two years.

Apart from the early reports of actuator

clogging that I mentioned, the available

postmarketing use data does not suggest any

problems in terms of safety, efficacy, tolerability

or patient acceptance of these two alternatives.

Perhaps the most difficult of the criteria

to address is the fourth. This is the criterion

that states that patients who medically require the

ODS are adequately served by the alternative. This

term, "adequately served," is fairly broad and it

encompasses a number of things.

Clearly, the most important is that the

available data on the alternatives must demonstrate

sufficient efficacy and safety and tolerability and

so forth such that the alternatives could be

considered reasonable replacements for the CFC

MDIs. This type of data was submitted with the NDA

and has accumulated in a postmarketing period and

seems to imply that the alternatives do meet these

criteria.

But there is a further subtlety to the

adequately served phrase here and that is cost. As

Dr. Meyer mentioned, during the process of the ANPR

and the proposed rule, there were comments about

the effect of this rule on the price of

medications. In the Preamble, in the Federal

these criteria were established, the FDA clearly

stated that it will consider cost in determining

whether the alternatives meet patient needs.

So I am going to take a couple more slides

to just look at this cost issue a little bit in

more depth. As with most drugs, branded CFC

products cost more than their generic counterparts.

As it turns out, in this very complicated

healthcare system that we have in the U.S. in which

the specific price of a medication varies according

to a number of factors including who is paying, it

is somewhat difficult to arrive at "the" price of a

drug.

Therefore, it is somewhat difficult to

arrive at a clear statement of the differential

between the cost of a branded product and a generic

product. Dr. Lutter will go into this in a little

bit more depth and talk about the various sources

of data that are available for the price of a

medication and how complicated that issue is.

I have provided on this slide some data

from an FDA website that highlights the cost

savings to a patient that can be achieved with

generic products. The web address is in your

handouts. On this site, data on the average

national retail price, which was data from IMS

Health, were used to generate this information so

that the retail cost per day for an asthmatic

patient who used Ventolin would be $1.44 whereas

the CFC generic would be 69 cents per day.

Of course, this is a comparison between a

CFC generic and a CFC branded, so it is important

to note the branded HFAs, in general, are priced

comparably to the branded CFC products although not

exactly the same price.

The other element to this is that there

are a number of existing patents and, due to these

patents, there are currently no generic HFA

products available. These patents are listed to

expire, the first one in 2010 and the final patent

in 2015. So, given the current realities, the

removal of the essential-use status of albuterol

would result in an increase in the price of

albuterol MDIs.

The public-health consequences of such an

increase in price are not known and are, in fact,

very difficult to predict. One possibility would

be that patients who are prescribed albuterol

metered-dose inhalers may be either unable or

unwilling to pay for that and so may not purchase

the albuterol inhalers.

It is also possible that an increase in

the price of an albuterol MDI, which is an

acute-reliever drug from which patients, as you

know, perceive an immediate benefit, might result

in them forgoing filling prescriptions of other

medications such as asthma-controller drugs from

which they don't receive the same immediate

feedback. But, as you know, controller drugs are

quite important in the appropriate management of

asthma.

So, as I mentioned, Dr. Lutter will

discuss in greater depth these economic aspects

including descriptions of the various sources of

price data that are available and means for

estimating how changes in the price of albuterol

MDI might affect the utilization.

As I mentioned, that is a difficult task

in and of itself, how will an increase in price of

an MDI translate into a change in utilization of

albuterol and, even if we were able to establish

that firmly, the next question that begs answering

would be how does the change in utilization

translate into important health outcomes. Of

course, that is an open question as well.

So, before I close, as I mentioned, I want

to bring up a couple of other issues that are not

directly responsive to the criteria in 2.125 but,

nonetheless, may be quite important in

considerations regarding a path forward on

albuterol. Both of these issues relate to the

future availability of chlorofluorocarbons.

The first issue has to do with production

facilities. Currently, the only source of

pharmaceutical-grade CFC 11 and 12 for use in the

U.S. is Honeywell's plant in the Netherlands. CFC

11 and 12 are the particular chlorofluorocarbons

that are contained in the albuterol CFC MDIs.

The Dutch Government has informed

Honeywell that CFC production at that factory will

no longer be permitted after 2005. So that might

jeopardize the supply of CFCs that are necessary

for the manufacture of albuterol MDIs but also all

of the other MDIs that use pharmaceutical-grade

CFCs. However, Honeywell has stated in its

submission to the docket in response to the citizen

petition that it will begin production of

pharmaceutical-grade CFC 11 and 12 at a U.S. plant

and will be able to supply CFCs beyond 2005.

Honeywell will also be speaking during the open

public hearing session today.

The second issue that touches on the

future availability of the CFCs refers to potential

actions that might be taken by the parties to the

Montreal Protocol. So, as Dr. Meyer mentioned,

each year the U.S. and other countries who request

to manufacture CFC MDIs, go through a nomination

process whereby specific quantities of CFCs are

requested of the parties.

Thus far, the parties have respected the

U.S. determination that albuterol is, in fact,

essential and have granted the volumes requested by

the U.S. However, more recently, the parties have

very pointed noted the availability of two non-CFC

alternatives within the U.S. and some have

questioned the continued need for

chlorofluorocarbons for this purpose. It is not at

all clear how long the parties will continue to

grant CFC requests for use in albuterol MDIs.

So, with that, I will close. I have

listed on this slide the questions or topics for

discussion that have been provided to you in a

handout format. Essentially, the agency is asking

you to discuss the extent to which you believe the

criteria that are established in the 2.125 for

removal of a drug substance from the list of

essential uses of CFCs have been met in the case of

albuterol. Beyond that, we are open to hearing

from you any suggestions of additional data,

additional information or other issues you think

should be considered as we move forward in this

process of determining the essential-use status of

albuterol.

With that, I will close.

DR. CHINCHILLI: Thank you, Dr. Sullivan.

Again, we are ahead of schedule so we can take some

questions from committee members if there are any

questions. Yes, Dr. Atkinson?

DR. ATKINSON: Can you comment on whether

the existence of the patents on the new HFA devices

are going to preclude the development of any

generics until that time period? Are there any

pending applications for generic devices?

DR. SULLIVAN: Of course, we can't comment

on any pending applications. The analysis of

patents is a complex issue that the FDA doesn't

really directly do. Companies claim they have

patents which protect them. If a generic firm

wants to challenge that patent, they can. I think,

beyond that, perhaps I will invite Wayne Mitchell

to comment more specifically, if he can.

MR. MITCHELL: I really can't say much

more. We don't have any institutional expertise on

patent law. Patents are listed in our Orange Book.

The patents are listed through 2015. That is about

all we really can say.

DR. CHINCHILLI: Any other questions? Dr.

Sullivan, I have a question. In one of your

slides, when you talked about Proventil HFA, you

said that early reports of actuator clogging were

available. Does that imply that there are no

longer reports of this problem? Were there

modifications to the device? I just was confused

by the word "early" reports of actuator clogging.

DR. SULLIVAN: That refers to the fact

that when the product first went on the market--and

it is not unusual to get more reports on a

particular drug when it first hits the market, but

the agency became aware that patients were having

problems with the clogging of the actuator and an

effort was made to better publicize the necessity

of cleaning these products because, although the

cleaning instructions were included in the CFC

versions, they may not have been followed by

patients.

It was determined that if the instructions

are actually followed, there are fewer reports. I

believe that the number of such reports has

declined. That was sort of an early phenomenon.

DR. CHINCHILLI: Thank you. Any other

questions? Okay; if not, then we will move on to

Dr. Lutter.

Economic Considerations

DR. LUTTER: My name is Randy Lutter. I

manage a small economics group within the Office of

Policy and Planning, Office of the Commissioner at

FDA. It is my pleasure to be here.

I would like to talk to you today about

the question of whether or not delisting albuterol

will have effects on--whether the patients will be

adequately served by delisting albuterol.

Let me begin by giving you an overview.

The key conclusion is that delisting albuterol CFCs

will deter the use of a number of prescribed MDIs

that is large in absolute terms but small relative

to the market. Our analysis is ignoring an

announced giveaway by GlaxoSmithKline of 2 million

MDIs per year because we lack a basis to evaluate

that quantitatively. We also find that the effects

on public health are too uncertain to quantify.

Let me give you some brief institutional

background of how an economist ends up in the

position of speaking before a group of esteemed

pulmonary and allergy advisors to FDA. There is an

executive order, 12866, signed by President Clinton

in '93 and it actually follows one signed by

President Reagan in '81. It directs the agencies

to assess the costs and benefits of all regulatory

actions developed through the notice and comment

rulemaking that Dr. Meyer described earlier.

The office that I had at FDA develops the

economic analyses required by that executive order.

The method of economic analysis that we developed

follows the constraints of OMB Circular A-IV which

is the latest in a series of circulars developed by

the Federal Office of Management and Budget

directing agencies on how to conduct economic

analyses.

The executive order directs agencies to

assess the cost and the benefits and to take

regulatory actions which are cost-effective but

economics also is reflected in the decisions of the

Montreal Protocol. Drs. Meyer and Sullivan have

mentioned the term "essential," and "essential

use," turns on whether there are available

technically and economically feasible alternatives

or substitutes that are acceptable from the

standpoint of environment and health and that is in

Decision IV-25. Section 2.125 uses the phrase

"adequately served." As described by Dr. Meyer,

that has economic content.

So there are actually three institutional

reasons why economics matters for the current

decision.

A brief discussion of economic

fundamentals. The issue here is that delisting

would remove albuterol MDIs with CFCs. Those are

currently the only generic albuterol MDIs on the

market. Therefore, one would anticipate on that

basis an increase in the price. So the broad

question is whether or not that increase in price

has effects on whether or not patients are

adequately served.

To comply with the executive order, we

need to assess the benefits of delisting and, in

particularly, a relatively earlier delisting as

opposed to a later one, and also the costs of

earlier delisting.

The benefits come in four separable

categories. The first is a controlled transition.

You have already heard presentations about the

nature of the international cooperation and the way

that that might affect the availability of CFCs by

offering a relatively--by proceeding with this

rulemaking, FDA hopes to establish an opportunity

for a controlled transition to CFC-free MDIs.

The second category of benefits is clearly

the environmental ones that Dr. Meyer has

described. Reduced emissions would lead to

reductions in skin cancers, cataracts and

UVB-related ecological benefits. For this, our

proposal, FDA has not been able to quantify the

benefits in terms of skin cancers, cataracts or

UVB-related ecological benefits.

Some analysis in quantitative terms has

been conducted previously by other federal agencies

including the EPA. The difficulty that we face is

in translating their estimates of aggregate

benefits to the benefits from the much smaller

reductions of CFC emissions that might be achieved

from this rulemaking, and we haven't been able to

do that for this proposal.

A fourth category of benefits pertains to

international cooperation. Dr. Meyer did not

understate in any way the importance of the

Montreal Protocol. It is a flagship treaty for

successful international environmental protection

and it enjoys wide respect and esteem for that

reason.

A final category of benefits is that this

rulemaking may encourage innovation in

environmental safe technologies.

In terms of the costs, I would like not to

focus on the increased spending associated with a

higher price of MDIs but, instead, focus on a

related question of whether or not the increased

prices may deter appropriate usage. I think that

is the appropriate issue for this panel and that is

the one that I am going to devote the rest of my

time to.

Also, by way of background in economics, a

key notion is what are we comparing the world to

when we do our analysis. We need to describe what

is the baseline relative to which we are assessing

the effects of delisting. The baseline in this

instance is the continued availability of generic

CFC albuterol. So the analysis that we are

conducting is relative to a world in which the CFC

albuterols continue to be available and, therefore,

the generic CFCs also continue to be available.

What I am going to focus on is a

relatively standard and conventional economist

approach to estimating the response to higher

prices. It really focuses, in particular, on the

estimated quantity of metered-dose inhalers that

may not be consumed as a result of the increased

price. It interprets this as the

product, really, of three things. One is the price

increase in percentage terms. The other one is a

measure of the consumer sensitivity to the price

increase, a measure the economists typically

describe using the word "elasticity," and, lastly,

the MDIs sold in the baseline to price-sensitive

consumers. So these are three parameters that I

will draw your attention to.

With respect to the price increase, the

prices are, of course, variable in a particular

way. The vary with market conditions and they vary

also in response to the marketing decisions made by

the different companies marketing the products. As

a result, the assessments of the price are

difficult not only because of the data deficiencies

but also because, ideally, we need to be looking

forward to what the price difference might be

between a world where the albuterol CFCs are

delisting and a world where they would continue to

be available.

That forward-looking approach requires and

association of these prices that takes the

variability into account. For the purposes of our

analysis, that is too complicated and we are,

instead, going to take the current price

differences as a measure of the price increases

from the delisting. The merits of this approach

are simplicity, transparency and also consistency

with an announced policy of GSK that it would

freeze wholesale prices through December, 2007.

Where does one go for information on

prices? In the modern day, Google comes to mind as

a source of all information. If you go to Google

and look for prices, you come to drugstore.com. It

listed generic MDIs with albuterol on the 24th of

March for $14. HFA at drugstore.com sold a

Proventil. The Proventil HFA was sold at $39.61

and Ventolin HFA sold at $38.99. Those prices I

have checked twice and they were relatively

unchanged in the recent period.

That gives an increase of about 180

percent just comparing the generics to the HFA.

But these web-based prices are really

unrepresentative. They neglect the

brick-and-mortar outlets. They neglect shipping

costs. Ideally, what one would want are average

retail market prices for the cash-paying customers

who would be sensitive to price increases.

We have not acquired these idea data for

the analysis that we have conducted for this

proposal. So, instead, I am going to talk to you

about data we have acquired which are the best

available proxies at this moment.

The Medical Expenditure Panel Survey of

the Agency for Healthcare Research and Quality

provides some information on prices. This survey

assesses expenditures by the noninstitutionalized